Housing costs have risen considerably over the past couple of years, especially for home buyers. The median house value in the U.S. rose by 20% over the past year alone, according to one source.
As a result, the typical or average monthly mortgage payment among home buyers has risen sharply. We used current home prices and mortgage data to determine what a “typical” monthly payment would be.
For those buying a home in 2022, that average would come to around $2,071.
It’s Time for Some ‘New Math’ in 2022
In recent weeks, several reports have been published claiming to show the average monthly mortgage payment in the U.S. for 2022. But most of those reports used data from the last “American Housing Survey” created the U.S. Census Bureau — which came out in 2019.
I probably don’t have to tell you how much the housing market has changed since 2019. During the second half of 2020, and through all of 2021, the U.S. experienced record-breaking home price growth. In some of the hottest housing markets, median home values rose by more than 30% in a single year.
On top of that, we’ve seen a sharp rise in mortgage rates during 2022. Earlier today, in fact, researchers from Freddie Mac reported that the average rate for a 30-year fixed mortgage rose to “five percent for the first time in over a decade.”
According to a March 2022 report from the National Association of REALTORS®, “monthly payments [among homeowners] have risen by 28% from one year ago.”
When it comes to the typical or average mortgage payment in the U.S., some “new math” is clearly warranted. So let’s get to it…
Typical Mortgage Payment for 2022 Home Buyers
We used home-price data provided by Zillow, average mortgage rates from Freddie Mac, and the median down payment identified in a 2021 report from the NAR.
Here are the numbers:
- According to Zillow, the median home value for the U.S. was around $337,560, as of spring 2022.
- According to Freddie Mac, the average rate for a 30-year fixed mortgage was 5%, as of mid-April 2022.
- According to NAR’s “2021 Home Buyers and Sellers Generational Trends Report,” the median down payment among all home buyers was 12%.
We ran those numbers through a mortgage calculator (along with insurance and taxes) to get a sense of the average or typical monthly mortgage payment for current home buyers.
Based on the above parameters, a typical mortgage payment for a person buying a home in 2022 would come to around $2,071.
Of course, this figure comes from average and median data for home prices, mortgage rates, and other housing-related costs. Some home buyers in 2022 will end up with a much smaller or larger monthly payment, due to a number of variables.
For instance, the median home price in San Jose, California is more than four times the national median. So a typical home buyer in that high-priced housing market would pay a lot more than the average monthly mortgage payment above.
The amount of money put down, the length of the loan term, the borrower’s credit score, the property tax rate — these factors and more can influence the size of a homeowner’s monthly payment. Even so, the above figures give us some sense of where the average lies in 2022.
Different Numbers for First-Time Buyers
The NAR report cited earlier states that the median down payment among all home buyers was 12%. But first-time buyers tend to make smaller down payments, on average, when compared to repeat buyers.
There’s an obvious reason for this difference. First-time buyers don’t have the profits from a previous home sale to put toward their next purchase.
According to a January 2022 blog post from the National Association of Realtors:
“However, in actuality the typical down payment for first-time buyers has ranged between six to seven percent since 2018.”
Using the same home price and mortgage rate data from earlier, but lowering the upfront investment to 6%, the average monthly mortgage payment would come out to $2,234. This might be a more accurate payment amount for those buying a first home in 2022, with a down payment closer to 6%.
Meanwhile Interest Rates Continue to Climb
Home-buying costs continue climb in 2022. As mentioned earlier, the median house value in the U.S. rose by double digits over the past 12 months alone. Mortgage rates have shot up as well.
On April 14, the mortgage-buying corporation Freddie Mac reported that the average rate for a 30-year fixed home loan had risen to 5%. That’s the highest average in more than ten years, and it could rise even higher over the coming months.
The April 2022 Freddie Mac report stated:
“As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation.”
With rising house values, mortgage rates and inflation, it’s no wonder why so many Americans can’t afford to buy a home these days. If these trends continue, homeownership could become a luxury for only the wealthiest Americans.
Disclaimer: This report estimates the average monthly mortgage payment in America among recent buyers, based on current house prices, interest rates, and other factors. Housing costs can vary due to a number of factors. As a result, these figures won’t apply to all home buyers.